Cost containment can be expected to affect virtually all participants in the market for mental health services. Although containment of hospital costs has been a primary objective, one result can be the substitution of outpatient and long-term care services for inpatient care, or decreased access to both inpatient and outpatient services. Analyzing the desirability of various dimensions of the cost containment environment involves tracting the impact of that environment on all affected parties. In this research we propose to focus on two types of policy impacts: (1) the effectiveness of various method of paying for inpatient psychiatric care in containing costs; and (2) the consequences of decreases in third party coverage and diminished availability of health and mental health services for access to mental health care for needy individuals. Data from New York and Maryland during the early 1980's will be used to analyze three hospital payment methods: per diem rate setting, per case prospective payment and prospectively set fixed budget funding. The analysis of access to mental health care will use the Baltimore Epidemiological Catchment Area data after a modest data augmentation effort.